All posts tagged Alaska

Royal Dutch Shell PLC says its runaway oil rig is now “grounded but stable” near an island in Alaska’s Ocean Bay, well south of the Alaskan Arctic. How Shell manages from here will be critical to the oil industry’s plans to expand U.S. oil production in the post-BP spill world.

The Obama administration’s decision last year to allow Shell to drill for oil off the northern coast of Alaska was controversial with environmental groups and oil-industry skeptics in Congress. They declared that when something went wrong in such a remote and challenging region of the world, the results could be catastrophic. Images of Shell’s Kulluk rig washed up on the rocks have prompted critics of Arctic drilling to renew those warnings even though, so far, there’s no sign of a significant fuel spill.

“Oil companies keep saying they can conquer the Arctic, but the Arctic keeps disagreeing with the oil companies. It’s clear from multiple incidents that oil companies cannot currently drill safely in the foreboding conditions of the Arctic, and drilling expansion could prove disastrous for this sensitive environment,” said U.S. Rep. Ed Markey, (D.-Mass.), a long-time critic of Big Oil. “I will continue to monitor this developing situation, and am hopeful that no oil or fuel will spill into the environment.”

The WSJ’s Keith Johnson, who follows energy issues from Washington, D.C., says so far there is no sign that the incident is going to derail what he calls the new normal for federal energy policy the Obama administration has sought to establish since ending a moratorium on new offshore drilling imposed during the BP-Deepwater Horizon spill in 2010.

The U.S. is on track to produce large volumes of oil and gas in increasingly complicated ways, Johnson says. The long-sought goal of North American energy independence is within reach — the International Energy Agency says the U.S. could produce more oil than Saudi Arabia by 2020. As with any omelet, a few eggs are bound to get broken. But few will want to get in the way of grasping the prize.

More on the potential ramifications of the accident in the full post. Read More »